Loopholes in COVID-19 Unemployment Program Threaten to Deplete Home Care Workforce

In the past two weeks, nearly 10 million people have filed for unemployment, pushing the jobless rate “certainly higher than at any point since the Great Depression,” according to the New York Times.

These unprecedented times have prompted unprecedented benefits: Thanks to new pandemic unemployment assistance (PUA) created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), more people than ever qualify for unemployment benefits — and those benefits are more lucrative than ever before.

While PUA’s aim is positive, it could have a negative impact on home-based care providers. That’s because the lush new financial benefits exceed what many caregivers would typically receive while working, incentivizing them to look for loopholes and pursue unemployment rather than remain in the workforce at a time when home-based care is more important than ever. 


Some agencies have already started to see those situations play out. Take Sunrise, Florida-based Interim HealthCare for example. 

“We’ve seen that in pockets, where people have requested that we lay them off,” Jennifer Sheets, CEO of Caring Brands International and head of Interim HealthCare, told Home Health News.

Interim, which specializes in nonmedical home care but also offers home health and hospice, is a home-based care franchise with more than 300 locations across the U.S. Caring Brands International is its parent company.


Sheets estimated that about 10 locations have brought the issue forward, most often those in urban areas with large numbers of nonmedical home care clients.

“I’m not privy to all the considerations that went into the regulation, but you just scratch your head going, ‘In a way, this has backfired,’” Sheets said. “It’s almost like we’re incentivizing people not to work now, which is exactly the opposite of what we need, especially in health care.”

The historic enhancement to unemployment benefits comes in the form of an extra $600 per week — on top of state benefits — for up to four months for people whose unemployment or inability to work is related to COVID-19.

Weekly non-PUA unemployment benefits vary by state. But in New York, where home care attorney Emina Poricanin practices, the maximum weekly benefit is $504, meaning that it’s possible for someone on unemployment as a result of COVID-19 to bring in about $4,500 a month.

Even for those who aren’t pulling in the maximum benefit possible, the amount could still conceivably exceed what a typical caregiver takes home in a month, as the profession is traditionally marked by low wages. 

“From a home care agency perspective, [agencies] are concerned that they’re going to be losing caregivers, and that they will not have enough staff to provide services,” Poricanin told HHCN. 

Poricanin, founder and managing attorney at Poricanin Law, said that of her hundreds home-based care agency clients, dozens have reached out with questions. 

“They were getting calls from the caregivers themselves, who saw the news and understood that this would be a very freely provided benefit,” Poricanin said. “[Caregivers realized] they could now apply for unemployment, even though, previously, there had to be a job loss or some other employment loss for them to qualify for unemployment.”

PUA benefits are much more widely available than traditional unemployment benefits. For example, a worker who is the primary caregiver of a child who is out of school due to COVID-19 is eligible for the expanded benefits, as is a worker who lives with a person who has or could have COVID-19. And those are just a few examples of qualifying coronavirus-related circumstances.

While workers technically don’t qualify for the benefits if their employer is paying them sick leave or other paid leave benefits, that hasn’t stopped some caregivers from trying to abuse the system, according to Angelo Spinola, an attorney and shareholder at San Francisco-based law firm Littler Mendelson.

He recounted the story of an agency owner in New Hampshire, where three caregivers were on paid leave after being exposed to COVID-19.

“Three of them applied for unemployment, and two of them got unemployment the next day,” Spinola told HHCN. “So they’re getting paid by [the agency owner] and then getting unemployment on top of it, and she never had an opportunity to contest that.”

Like Poricanin, Spinola has been fielding questions about the new unemployment benefits from clients left and right.

“It’s very, very challenging,” Spinola said. “I think it’s the most challenging time I can remember in my career to provide advice because the laws are changing so rapidly [in light of COVID-19].”

In this case, he’s hoping the rapid pace of new legislation works in providers’ favor — or in other words, that the federal government further clarifies the new unemployment benefits or attempts to close loopholes that currently exist. 

“It was never intended for anyone in Congress to pay somebody more money for not working than working,” he said. “It was never intended to incentivize people to not work when they could work.”

While Poricanin is likewise hoping for more federal clarity, she’s also advising clients how to best operate under the rules that currently exist. That means encouraging providers to introduce longevity incentives, seniority-related perks or other financial motivators. 

One home care agency HHCN recently connected with inadvertently followed that advice, even before the new expanded pandemic unemployment benefits were introduced. That provider was Hackensack, New Jersey-based CareFinders, which has rolled out appreciation pay for its workers and has not yet had any problems with caregivers trying to capitalize on unemployment, CEO Jim Robinson told HHCN. 

“Was there appreciation? Absolutely,” he said. “But more importantly, a ton of them said, ‘Thank you for showing that you care for me.’”

But in an industry with already thin margins, not every agency can afford to finance appreciation pay. However, most agree it’s warranted, and some have posed the question: What can the federal government do to help? 

“I would love to see something like government-supplemented hazard pay for health care workers dealing with COVID-19,” Sheets said. “We need to incentivize people to be on the front line, especially in a pool that’s already prone to high turnover.”

Spinola agreed, saying hazard pay for front-line workers could be part of the government’s next stimulus bill. But he questioned whether that would be enough, soon enough, especially because so many loopholes still exist in the unemployment rules themselves.

“I think we will see something,” he said. “How immediate that’s going to be is the real question — and exactly what is the vehicle for putting this fix in place? To me, it looks like it’s the stimulus package, but I know that’s not quick enough for a lot of people.” 

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